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Bigger potatoes may be in short supply

Despite weather-caused delays during the planting and harvesting seasons over most of the country’s potato acreage, the national supply should be generous for the 2011-12 season.

“We think there are going to be ample potato supplies again this year,” said Mike Gorczyca, procurement manager for foodservice distributor Pro*Act, Monterey, Calif.

Gorczyca said he expects supplies to be tighter for the larger potatoes, 70-count and up.

“Once everything gets into storage I think supplies are going to tend toward 100s, 90s and 80s,” Gorczyca said. “As you get into the 70s and larger, supplies are going to be limited as they were last year.”

The size profile for potatoes coming out of Wisconsin is also down slightly, said Mike Carter, chief executive officer of Bushmans’ Inc., Rosholt, Wis.

“Yields were definitely down in Wisconsin pretty well across the board,” Carter said. “Supplies aren’t where we hoped, but it sounds like there are additional supplies in other areas we can take advantage of.”

Colorado is one of those areas.

“From a 30,000 foot level, Idaho’s size profile appears to be down, but then you have Colorado which grew a huge crop this year with all these huge potatoes,” Carter said. “It almost seems that it’s going to even out, Colorado’s going to be shipping a ton of boxes, Idaho’s going to be shipping bags, and we’re going to be the just-in-time guys.”

Idaho’s overall acreage was up this year, largely because of contracts for the processing market, said Frank Muir, president and chief executive officer of the Idaho Potato Commission, Eagle. The volume going into the fresh market is similar to last year, Muir said.

During the 2010-11 season, the state had its first frost the very first week of September, killing the crop and limiting its size, said Travis Blacker, president of the Idaho Falls-based Idaho Grower Shippers Association. This year the first frost wasn’t until early October, so the potatoes had a longer time to grow.

In Wisconsin, potatoes got into the ground two weeks late this spring because of low temperatures, and Carter said growers spent the rest of the spring and summer expecting the crop to catch up.

“At the end of the season, we never really did catch up from that late planting,” Carter said.

Quality is there, though, Carter said. Bushmans’ markets a full line of potatoes, with russets making up the bulk of its business. The company co-owns the Sierra Gold potato with Discovery Gardens, and also markets red and yellow potatoes in its specialty line.

Yields have looked good in Washington, although the state also ran a few weeks behind in planting and harvesting this year, said Karen Bonaudi, director of marketing and industry for the Washington State Potato Commission.

The western side of the state, in particular, was having trouble wrapping up harvest late October because of rain, Bonaudi said. Growers also tried to leave the spuds in the ground as late as possible to let them size up, which they hadn’t done through the mild summer.

Eastern Washington is responsible for most of the state’s russet potatoes, while the western side of the state is home to more red, yellow, gold and other specialty varieties, including purple and blue potatoes and fingerlings, Bonaudi said.

Ted Kreis, marketing and communications director for the East Grand Forks, Minn.-based Northern Plains Potato Growers Association, said the supply of red potatoes nationwide will be manageable at current or higher prices. Processors appear to be short of contracted potatoes, which could help the fresh russet market price and in turn the red potato growers, Kreis said.

Supplies of red potatoes grown in the Red River Valley of North Dakota and Minnesota are on par with the average, said Paul Dolan, general manager of Associated Potato Growers, Grand Forks, N.D.

“Quality is better than last year,” Dolan said. “The size profile is a nice marketable profile, not to have too many in any one size.”

Muir said the supply situation in Idaho is similar to the 2010-11 season, which resulted in record prices for potatoes, especially on cartons. The markets have backed off since harvest began this spring, but many expect them to firm up throughout the season.

Firmer market coming

“Markets are down right now, having come off quite a bit from a few months ago, which is usually the case during harvest,” said Jamey Higham, vice president of foodservice for Idaho Falls, Idaho-based Potandon Produce. “Once everything’s in storage I expect it to firm up a bit.”

Muir said cartons should be a big opportunity for shippers again this year.

“You could see the market firm up in January and February,” Pro*Act’s Gorczyca said. “That’s when we’ll see if we don’t have the top of the size chart.”

Norkotahs, which tend to be larger than russet burbanks, should last through the first of the year.

Richard Medina, vice president of Superior Tomato-Avocado, which brings in potatoes and onions out of Idaho and the Northwest, said he doesn’t expect markets for either commodity to stay too low too long.

“Retail takes advantage of the weak market, so we’re seeing a lot of ads on the retail side,” Medina said. “Retail looks for the value for the customer. And as the weather gets colder, they’ll sell a lot more potatoes and a lot more onions.”

Medina said retailers are looking to put 5-, 10-, 15- and even 20-pound bags on ad.

“At the beginning of the season it was a challenge to get movement due to high markets through the summer and early fall because of the short supply of potatoes,” said Dolan of Associated Potato Growers. “We needed to get rates back at a level where movement would increase.”

Rexburg, Idaho-based Wilcox Fresh grows 3,600 acres of potatoes in Idaho, and has come out with potatoes on the larger end this year, said Jim Richter, executive vice president of sales and marketing.

Although the company was late planting in the spring because of the cold spring, nice weather in September helped the crop size up, Richter said.

“The crop is going to be larger than we initially expected, “Richter said. “It’s going to be a good year to promote larger-sized potatoes.”

The company plans to aggressively promote larger potatoes, including in bags.

“What we believe will happen in Idaho in general is larger-size potatoes will be at the front of promotions for holiday periods,” Richter said. “It’s a lot easier to peel 70-count potatoes for your mashed potatoes at Thanksgiving.”

New crop prices have dropped, but most retail prices have not dropped as fast as f.o.b.s as retailers try to recapture some margin, said Mac Johnson, president of Denver-based Category Partners, a retail marketing firm that is owned by Farm Fresh Direct LLC, Monte Vista, Colo., and Wada Farms, Idaho Falls, Idaho.

Johnson said consumers reacted to the high market for potatoes by trading down to more affordable packaging sizes or delaying their purchase waiting for a promotion.

Prices

Out of Idaho, baled five 10-pound film bags nonsize A U.S. 1 (2-inch or 4-ounce minimum) burbanks brought $6.50-7 in early November.

Out of San Luis, Colo., baled five 10-pound film bags nonsize A U.S. 1 nokotahs brought $7.50-8.

Out of the Red River Valley, five 10-pound baled film bags of size A round red U.S. 1 brought $12 in early November and 50-pound sacks size A brought $11.